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Revolut are work $25b vs Redwood £50m, could not see this being a partnership that Revolut would consider.
I think it is possible the reason Revolut do not have a banking licence is because they don't want one. If they get one they are open to more legislation which ultimately means they need to protect customers more and then comes at a cost. They seem to be able to operate just fine without the licence, I use Revolut for my business account and know it gives me no FSCS protection or fraud protection but needed to use them for another reason.
If I'm wrong and it turns into 20p it will be a 30x bagger for me, so hope I'm wrong. Just can't see a path to me not being right.
Stand corrected there was a post on the 14th September about the tweet and a suggestion of a RTO.
Buda_, the wishful thinking may make us some money yet. When it's relisted if there is enough blind optimism we may have a quick pump and dump scenario.
I'm trying to workout if people actually believe the 20p per share valuation that's been mentioned a few times on here or if they are just trying to pump and dump.
Trading off the rumours and volatility of the last suspension I've managed to be up about 300% on this investment. One thing that is guaranteed is when it re-opens it will definitely be a volatile share again.
Crober33, there were posts on here about companies house papers being signed by a mergers and acquisitions solicitor. The feeling on this forum was that they would be bought for the crypto licence, which if they were I'd have expected them to be bought for circa £5m.
Not once was a rumour of a reverse takeover mentioned, not once was Redwood Bank mentioned. It sounds like you predicted it but did not care to share it, any thoughts on the lottery numbers this week?
DJMTrading91
If Redwood do wish to acquire other lenders and loan books surely they'll need to dilute the company even further.
If they buy good quality loan books (which are rarely for sale as the junk is usually sold) this could be a good long term play but no quick increase that anyone is suggesting.
It seems like people are clutching at straws as to why this could be a multi bagger but people never think the whole ideas through.
Metrobank market cap today is £214m, not sure it's even worth 25% of Metrobank let alone multiple times the value.
You could even go as far as saying £50m equity swap is a bad deal, but that would assume Mode is worth something in the first place. We're being thrown a lifeline is what I think and we should be grateful for whatever we get.
Hope I'm wrong as I'm holding a decent amount of these, but think realism is required rather than optimism with this one.
DJMtrading91, you say "they both need the deal equally as much for different reasons".
I disagree R8/Mode need the deal and Redwood want the deal. If the deal falls through R8 will be wound up.
There is a huge different between wanting and needing something, hence why Redwood should be in the driving seat for any negotiations.
Crober23, agreed cost and time in listing has a value. I think this is the reason that Redwood will give up a small % of their equity on the basis that they will save cost and time.
With regard to the crypto licence, Redwood have not made any representations that it will be used. For all we know it licence may have expired or be sold, if they make use of this it is a bonus but I can't see that happening overnight when relisted.
I also think we need to look at this from a negotiation point of view:
1. Redwood are a bank that is surviving with or without a public listing, they want Mode to buy in exchange for no cash (just equity) as it is a cheap vehicle to get publicly listed. What are the consequences of the deal falling through, they don't get listed.
2. Mode are a failing business on the verge of liquidation, they want to buy Redwood to continue survival also so Jonathon Rowland saves a bit of face. What is the consequence of the deal not going through, no more Mode.
Now if you were either side of the table for the negotiation which party is in the stronger position to make demands. The only dynamic that changes this is Jonathon Rowland has a large share holding in each company, but not enough to make the decisions on his own.
Robinsond013, I expect it will be exactly that, then on the day of opening the market will decide which direction it travels.
Anything more than 2.25p means a bad deal for Redwood, don't think Redwood would sign off on a bad deal as they could just pay the extra money to get listed themselves.
Crober33, if you mean what is the share structure going to look like going forward. I'd imagine it may be a very last minute (just before listing) announcement so investors don't have time to analyse it too much. Jonathon Rowland seems to be a real slippery character when it comes to things like this.
Crober33, " what % are mode/r8 going to hold in Redwood" Mode are going to hold 100% of Redwood.
The issue with their assets going up 10X is they have no assets. 10X zero is still zero.
They'd need to swap £5m of equity and not £50m to achieve the speculations people are making. I'd love to be proved wrong but, the crypto licence does not add the value anyone has suggested.
Completely agree, this is just a cheaper vehicle to get Redwood bank listed. If I see 5p on re-open I'll be gone and never seen again.
Rowland set up Jellyworks in the dotcom boom which was valued at £300m and then sold at £67m, right place at the right time.
Rowland also tried to set up Jellybook in 2012 (when facebook became all the rage), trying to be in the right place at the right time again.
The Mode, trying to be in the right place at the right time again.
Demolition123, being valued at £300m will offer us no help as Redwood shareholders would not except £50m worth of equity for a business valued at £300m.
To open at 20p Redwood would have to sell at £50m and then be worth £500m, it's never going to happen.
Crober33 the RNS says a minimum of £50m, if they convince themselves it is worth £300m it's not going to be agreed at £50m.
I'm not sure how anyone could value Redwood at £300m when Metrobank is only valued at £233m.
On a good day I can't see the market cap exceeding £100m but could be as low as £20m once the dust settles.
Crober33 agree if they mentioned crypto today it would explode but the latest hype may be over by June.
This issue if Redwoods valuation goes up is they may ask for more equity which would mean we end up with even less. Increased valuations before the merger do us no favours.
Crober33, I don't see how it is possible.
To give Redwood £50m worth of shares they need to issue them, lets say they issue them at todays market price (no premium or discount scenario).
If they wanted to give the R8 shareholders a bigger share, lets say double then the Redwood purchase would no longer be £50m it would be £25m.